TaxTMI 
TaxTMI 
2019 (12) TMI 497
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....rred to as "the Act") dated 28/03/2000 relevant to Assessment Year (AY) 1997-98. 2. The Assessee has raised the following grounds of appeal:- (1) That on facts and in law, the learned CIT(A) has grievously erred in confirming penalty under section 271(1)(c) of the Act amounting to Rs. 1,28,631/-. (2) That on facts and in law, the learned CIT(A) has grievously erred by not considering the fact that "AO had passed the order without properly appreciating the facts and without giving opportunity of hearing to appellant which ought to have been given before passing the impugned order". Therefore, order is void ab initio and liable to be quashed. (3) The appellant craves leave to add, alter, amend and withdraw any of the above grounds of a....
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....or furnishing the inaccurate particular of income and worked out the penalty of Rs.1,28,631/- being 100% of the amount of tax sought to be evaded. Thus the AO levied the penalty under section 271(1)(c) of the Act. Aggrieved assessee preferred an appeal to the learned CIT(A) who confirmed the order of the AO by observing as under: "2.4. After going through the facts of the case, it is seen that Assessee had unnecessarily tried to bring the issue as disputed and claimed that no penalty is leviable. All the case laws cited by the appellant in regard and their ratios are not applicable to this case. In the appellant own case the Hon'ble ITAT vide composite order bearing ITA No.1093/Ahd/2002 and others dated 04/01/2017 confirmed the addition ....
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.... offered by him or explanation, even if not substantiated, is found to be bona fide - Held, yes - Whether if assessee makes a claim which is not only incorrect in law, but is also wholly without any basis and explanation furnished by him for making such a claim is not found to be bona fide, Explanation 1 to section 271(1)(c) would come into play and assessee will be liable to penalty - Held, yes" The Hon'ble Delhi Court in above case has also considered the decision of Hon'ble Supreme Court in the case of Reliance Petro products (P) Limited and held as under: "18. In the case of Reliance Petro products (P) Ltd. (supra), the addition made by the Assessing Officer in respect of the interest claimed as a deduction under section 36(....
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....ted that the penalty has been levied on the estimated addition which is very subjective/ debatable. Therefore, there cannot be any penalty qua said addition. 6. On the other hand, the learned DR vehemently supported the order of the authorities below. 7. We have heard the rival contentions of both the parties and perused the materials available on record. The assessee in the year under consideration has claimed guesthouse expenses amounting to Rs.17,62,372/- including the depreciation of Rs.3,89,813/- on such guesthouse building and other assets maintained therein. The assessee against such guesthouse expenses has shown recoveries of Rs.15,63,230/- leaving a shortfall of Rs.1, 99,142/- which was claimed as deduction in the profit and loss....
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....ere would not have been any disallowance of such expenses. Thus we are of the view that the assessee has not deliberately claimed such expenses. 7.5. In this regard, we find support and guidance from the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Reliance Petro Products Ltd reported in 322 ITR 158 wherein it was held as under: "A glance of provision of section 271(1)(c ) would suggest that in order to be covered, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The instant case was not the case of concealment of the income. That was not the case of the revenue either. It was an admitted position in the instant c....